Qualcomm warns Nokia over royalty payment

HONG KONG, Dec 6: US wireless technology firm Qualcomm Inc warned on Wednesday a long-running spat with Nokia could escalate and lead to a legal action if the Finnish firm halted royalty payments.

The US firm is locked in talks with Nokia over extending licencing agreements carrying an April deadline, but the Finnish phone giant wants Qualcomm to charge less -- a stalemate analysts say could prompt Nokia to cease payments of some 0 million to Qualcomm annually.

''Clearly, if Nokia is shipping products using our intellectual property and not paying royalties, then we will take steps to protect our interest,'' Chief Executive Paul Jacobs said in an interview on the sidelines of the ITU Telecom World 2006 in Hong Kong.

He also brushed off comments by Ericsson Chief Executive Carl-Henric Svanberg. Svanberg told Reuters earlier this week that he was optimistic Qualcomm would trim royalties in the face of complaints from Ericsson and other vendors it was over-charging on patents.

''Any talk of us lowering royalties really is speculation at this point,'' Jacobs said.

Qualcomm has filed legal actions against Nokia in the United States. The U.S. giant's legal team would explore more legal avenues -- and possibly fold subsequent actions into the existing ones -- if needed, Jacobs said without elaborating.

Matsushita Electric Industrial Co. Ltd., Nokia, Broadcom Corp., NEC Corp., Texas Instruments Inc. also complain Qualcomm's fees are higher than the agreed-upon standard of ''fair, reasonable and nondiscriminatory''.

Qualcomm's shares have plunged about 30 percent in the past six months, partly because of the uncertainty fomented by its legal disputes with Nokia and other firms.

''I'm not that optimistic as our negotiating teams are engaged in what they call a zero-sum game right now,'' he said.

''If that continues, then really it's going to take some outside leverage to get people to move, whether it's some deadline or some judicial decision.'' Qualcomm sells technology licences and chips based on CDMA -- the dominant standard for U.S. cell phones -- as well as those for GSM, the world's most widely used cell phone technology.

Its patents are also used in W-CDMA, known as the high-speed, third-generation standard more advanced than GSM.

REUTERS